Apple versus Harman

Apple has planned to release navigation systems for cars in the near future. This has affected the already existing navigation system providers such as Harman International Industries Inc. Harman, which is known for its audio devices also makes car navigation systems for luxury car companies such as Volkswagen AG’s Audi and Daimler’s Mercedes. After Apple Inc. announced its plans to offer voice activated real-time traffic updates and turn-by-turn navigation in cars, the shared of Harman International Industries fell as much as 10 percent on Tuesday.

The shares of car navigation systems maker Garmin Inc. also fell in trading on Monday after Apple said it plans to enter the market by integrating it Siri voice application into car navigation systems. By introducing this new feature called ‘Eyes Free’ Apple plans to make it easier for the drivers to get directions by just tapping a button on the steering wheel to launch Siri. An analyst from JP Morgan Mark Moskowitz said, “Within the next 12 months, Siri will be the backbone for ‘Eyes Free’ service, integrating Siri and maps into automobiles”. However, Dutch Navigation system maker TomTom is more likely to benefit from this move on the part of Apple as it has struck a deal with the technology giant to license its maps to the iphone maker. Apple’s new navigation system is still in the works and the company is working with several automakers including Audi, BMW, General Motors, Honda Motor Co., Mercedes and Toyota Motor Corp to introduce the new technology.

Harman was ranked by J.D Power and Associates in January as the No.1 supplier of factory installed car navigation systems. The shares of the company were down by 9 percent on Tuesday in the New York Stock Exchange, added to the 5 percent fall on Monday. While the shares of Garmin which were down by 9 percent on Monday saw an increment by 3 percent on the NASDAQ. Navigation system provider TeleNav’s shares also fell as much as 12 percent and Robert W. Baird cut the stock in order to “underperform” saying that Apple’s new service is likely to force the company to reduce it’s prices.

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